Focus on Windows growth in Microsoft's 4Q results

Investors will be watching Thursday for signs of how Microsoft's Windows franchise has fared amid worries that tablet computers just as the iPad are hurting sales of personal computers.

Revenue in the division that includes the Windows software has fallen from the previous year in each of the previous two quarters. In other words intensifying the pressure on the company to show growth in the April-June period.

Microsoft's business model of licensing software that's installed on individual computers as well is being threatened by the accelerating push to sell applications as services that are hosted over the Internet. The concept, dubbed "cloud computing," has been gaining traction as Microsoft rivals Google Inc. and Salesforce.com Inc. introduce more programs that can be used by any machine with a high-speed Internet connection. Microsoft recently began renting an Internet-delivered version of its widely used Office suite of software.

The quarterly results should as well give Wall Street a better feel on whether Microsoft's huge investments are likely to bear fruit. Though Bing's search engine has attracted more traffic in the past few years, it remains far behind Google in the Internet's most lucrative market. Google's dominance is one of the main reasons Microsoft's online division has been consistently losing money.

As part of its effort to close the gap, Microsoft is providing the research that runs Yahoo's search engine. However the partnership hasn't gone as smoothly as the companies hoped. Both Microsoft and Yahoo said in April that the partnership wasn't producing as much ad revenue as they anticipated, prompting them to delay expanding the alliance into other parts of the world. The shortfall as well required Microsoft to pay Yahoo more money to compensate.

Analysts surveyed by FactSet forecast revenues of 57 cents per share on revenue of $17.23 billion for Micrsoft's fourth fiscal quarter. Microsoft earned $4.5 billion, or 51 cents per share, on revenue of $16 billion a year ago.